Workforce Committee - leg.state.mn.us · The workforce challenges before us are ... examined to see...

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December 1998 Workforce Committee Final Report HD 5725 MO" late Majorit, leader Rouer Moe, Chair 1998 I LEGISLATIVE REFERENCE LIBRARY 3 0307 00028 6255

Transcript of Workforce Committee - leg.state.mn.us · The workforce challenges before us are ... examined to see...

December1998

Workforce CommitteeFinal Report

HD5725

MO"

~15~ late Majorit, leader Rouer Moe, Chair1998

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LEGISLATIVE REFERENCE LIBRARY

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ROGER D. MOEMAJORITY LEADERSenator 2nd DistrictRoute #3, Box 86AErskine, Minnesota 56535Phone: (218)574-2216

Room 208, State Capitol75 Constitution AvenueSt. Paul, MN 55155-1606Phone: (612) 296-2577

Dear Friend:

SenateState of Minnesota

December 1998

Minnesota's economy is booming. Unemployment rates are at a record low. The state'seconomic growth rate is exceeding even the most optimistic previous projections.

However, beneath the good news are some troubling realities. Minnesota is experiencing alabor shortage that may dampen future economic growth. Complicating the issue is a "skillsgap" which prevents many workers from getting better jobs and many businesses from findingthe skilled workers they need to increase productivity. Finally, while the averageunemployment rate is under 3 percent, some groups of citizens are still struggling to find jobs.For instance, the disabled community has an unemployment rate near 70 percent.

In an effort to respond to Minnesota's workforce challenges, I asked several leaders frombusiness, labor, higher education, state agencies, the community and the legislature to join meand participate in a task force. The goal was to assemble a group ofworkforce experts,representing a variety ofviewpoints, and seek their policy recommendations. This final reportcontains those recommendations.

I want to thank all of the committee members for volunteering their time and talents to thiseffort. I sincerely appreciate their hard work and dedication. I want to give special thanks toMonica Manning who volunteered as facilitator. She was very helpful in focusing ourdiscussions and our work.

The workforce challenges before us are huge, but Minnesota has many strengths that give us anadvantage over other states and nations. I believe we can move forward and rise to thesechallenges. I also believe that if we do not move forward, we will lose economic opportunitiesto other states and nations that are more responsive and positioned for the economic challengesahead.

To all of you who have been working on the front lines of these challenges, thank you for yourdedication. I promise to join you in your efforts. Together, we can position Minnesota'seconomy, employers and employees for even greater success in the future.

Sincerely,

~o?·~~Senate Majority Leader

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PREFACrill rn ~ ~ BWJz·o-o~o? illJIJN 0 9

A Changing Economy b!i9!SLAjt~:E Ri£f[f(ENCE liBRARY§fM~ §Pflg~ §Wh~ir,m

Th h · d' . fM' , 1 b ~ d ~l FAUL, MN ~~hlgl\l de c angmg con ItlOns 0 mnesota s a or lorce an economy createnuge c <U enges anopportunities to the people ofMinnesota.

Minnesota's unemployment rates are well below the national average causing labor shortagesfor many employers. Minnesota's seasonally adjusted unemployment rate was 2.2 percent inOctober 1998 compared to 4.6 percent nationally. Thirty-three counties had unemployment ratesbelow 2 percent for the same month. This compares to the fact that for decades the term "fullemployment" was defined as an unemployment rate in the 5 to 6 percent range. Achieving "fullemployment" has been the goal of federal and state policymakers, and policies, for severaldecades.

Most of those studying demographics and the economy believe today's labor shortage is chronic,not temporary. Further, the shortage cuts across every sector of our state's economy and alloccupations, regardless of skill level. Minnesota's high-tech industry currently competesnationally for skilled workers and they estimate they will need 8,800 new technology workersevery year for the next 10 years. A September 1998 report by the Humphrey Institute ofPublicAffairs, The Education Industry Report: Workforce Issues and Linkages, indicates that "in thenext 5 years, 18 percent, (or almost one-fifth), ofall Minnesota's teachers will be retiring."Others project that in the next 10 years, half of our teachers will be at or near retirement age.Many nursing homes are also fmding it difficult to fill nursing assistant positions as potentialworkers go elsewhere for higher wages.

In addition to this labor shortage is a "skills gap" that often prevents workers and businesses frommoving ahead economically. The training and retraining needed to plug this gap runs the gamutfrom soft skills to English as a Second Language (ESL) to industrial and high technology skills.For workers, this training may be the key to initially getting ajob or attaining a better job. Forbusinesses, this training may be the key to increasing productivity during a labor shortage andremaining competitive in a global economy.

The stakes to Minnesota's workers, businesses and the state as a whole are huge; Minnesota hasan opportunity to position itself for the 21 st Century. What better time to make these adjustmentsthan when Minnesota is in top fiscal health? By moving ahead on workforce strategies now,Minnesota can extend these good economic times and be more insulated from future economicdownturns.

Workforce CQmmittee Process

With Monica Manning volunteering as facilitator, the Workforce Committee meetingsfocused on building a shared understanding among members about current workforce trends,challenges, state accomplishments and what might be done to better position Minnesota's economyfor the 21 st Century. The process relied heavily on small group work, with the small groups often.developing an issue and then reporting their work to the full committee. The committee held fivemeetings over the summer and fall with the final meeting on November 30, 1998.

The committee concluded by identifying five policy recommendations. Each recommendation wasnominated and developed by separate small groups at the November 17, 1998 meeting and laterpresented to the full committee for review at the final meeting. The five issues developed intorecommendations were chosen as priorities from a list of fifteen issues advanced at the Septembermeeting.

The five policy recommendations are enclosed in this final report as well as a summary of the finalcommittee discussion and thoughts regarding those recommendations from the November 30, 1998meeting.

WORKFORCE COMMITTEE MEMBERS

Linda BaerSenior Vice ChancellorStudent & Academic AffairsMnSCU

M. James BensenPresidentBemidji State University

Duane BensonExecutive DirectorMinnesota Business Partnership

Robert BruininksExecutive Vice President & ProvostUniversity ofMinnesota

William BrumfieldDirectorHennepin Co. Training &Employment Assistance

Larry BuboltzDirectorRural Minnesota CEP

The Honorable Lyndon R. CarlsonMinnesota House ofRepresentatives

Mary EatonVice PresidentNorthwest Technical College

George EllisPolicy AdministratorMinneapolis Urban League

Don GerdesmeierTeamsters DRIVE Representative

Joe GrabaProgram OfficerMinnesota Higher Education Commission

Clell HemphillExecutive DirectorC01!nci! on Disability

Jan Hively*Director ofCommunity OutreachCollege ofEducation & Human DevelopmentUniversity ofMinnesota* Shared duties with Robert Bruininks

Roger HughesDirectorMinnesota Job Skills PartnershipDepartment ofTrade & Economic Development

Don/mslandDirectorImsland Associates

Rick KruegerPresidentMinnesota High-Tech Association

The Honorable Cal LarsonMinnesota State Senate

Monica M. Manning, PhDExecutive OfficerThe Nova Group

Workforce Committee Members,continued

The Honorable Roger D. MoeSenate Majority LeaderMinnesota State Senate

The Honorable Steve MurphyMinnesota State Senate

David OlsonPresidentMinnesota Chamber ofCommerce

Jesse OvertonPresidentSkytech Inc.

Rosemarie ParkAssociate ProfessorCollege ofEducation & Human DevelopmentWork, Community & Family EducationUniversity ofMinnesota

Hazel ReinhardtConsultant

Richard TvetltenSystem Director for Continuing Education/Customized TrainingMnSCU

POLICY RECOMMENDATIONS

I. INCUMBENT WORKFORCE DEVELOPMENT

POLICY: Expand access to training opportunities to provide for continuous improvement of skill.development across the entire workforce.

GOALS: Develop a systematic and integrated approach to education and training that allows allworkers to upgrade skills via incentives and partnerships among individuals, all levels ofgovernment,public and private employers and non-profits. Create flexible, continuous educational opportunities toassist workers to upgrade their skills during any phase of life.

STRATEGIES:

Incumbent Worker Strategies:• Provide varying incentives and encourage diverse partnering which assists different employer

and employee groups in responding to their particular training needs:• Employer - large, medium and small employers; also employers in rural, urban

and suburban parts of the state.Employees - employees already in the work force, i.e., incumbent workers,disabled and retirees.

• Encourage flexible training opportunities for all employees.

• Use technology to expand the times and places training is available to individuals, i.e., on-linecomputer training available at home or work.

• Educate people about the importance of life-long education and training for all employees.

Prospective Worker Strategies:• Expand the array ofjob and career options presented to junior high and high

school students (current mind set promotes four year degrees).

• Encourage partnering to address the cultural barriers faced by minority groups and immigrantswho seek training.

• Encourage partnering to assist employers and employees in removing barriers to education,training, child care and transportation.

EFFECT OF POLICY: This will allow individuals greater employment opportunities and increase theproductivity of the state's businesses by providing a better skilled workforce.

RESOURCES: Existing federal, state, local and private funding sources and mechanisms should beexamined to see how they can be maximized to attain on-going workforce development. Private sectorinvestment in education and training should be examined to better understand existing training resourcesand to facilitate education and training of employees.

Final Thoughts By Committee Members - November 30, 1998

This page reflects the November 30, 1998 discussion among committee members as theyreviewed the policy recommendation on incumbent worliforce development which had beendeveloped on November 17, 1998 by the small group working on this issue.

Incumbent Workforce Development - Workforce committee members a~eed that it iscrucial to expand access to training opportunities to provide for continuous improvement of skilldevelopment across the entire workforce. Expanding access to training and retraining wouldallow individuals greater employment opportunities and increase the productivity of the state'sbusinesses by providing a better skilled workforce. Much of the final discussion on this issuerevolved around questions of whose responsibility, or role, it is to provide or pay for the training,and who should implement or direct the training.

Responsibility for Training and Retraining? This part of the discussion concluded that aconsiderable amount of training and retraining·is being done by Minnesota's private employers,an estimated $2 billion annually, and the state's largest employers are the most likely to provideit to their employees. For a variety of reasons, small and medium-sized businesses often lackaccess to the training they need. Individuals who desire to upgrade their skills also often lackaccess to training opportunities. Members emphasized that individuals and smaller businessesshould be the focus ofnew efforts aimed at expanding access to training and retraining effortsand that a shared responsibility exists among individuals, businesses, government and trainingproviders to help make that training available.

What Entity Should Direct Training and Retraining Efforts? It is estimated thatMinnesota has 2.5 million citizens currently employed (i.e., incumbent workers) and memberscommented that no institution or entity is currently focused on making continued trainingavailable to them. It was suggested that the Minnesota State Colleges and Universities system(MnSCU), or a part of MnSCU, take on the role of training and retraining available to incumbentworkers, but that private business must be a key player in developing all programs. Others addedthat providers of training, individuals and businesses are really three constituencies and that theuse ofpartnerships, incentives and flexibility must be emphasized· in order not to centralize anyincumbent training efforts.

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POLICY RECOMMENDATIONS

II. SYSTEMATIC WORKFORCE DEVELOPMENT

POLICY: Improve the coordination of workforce training and raise the skill levels ofMinnesota'sworkers in order to attract and retain businesses and employees, expand local community economicdevelopment and strengthen Minnesota's competitive edge in the global marketplace. "Knowledge isthe resource of the future" and training which provides that knowledge is the key to being successfulin that future.

GOALS: Create a systematic statewide approach to provide an interface between employers,employees and training providers, while involving the state's industries, businesses, employers andhigher educational systems. Create a consistent system that incorporates economic and workforcedevelopment programs so they can work together and become one.

STRATEGIES:

• Concentrate' first on incumbent workers, underemployed and unemployed individuals whocomprise the current Minnesota workforce.

• This new statewide system/structure or process must be independent from existing systems,such as U ofM, MnSCU, DTED, DES, etc., although all of these groups will be involved.

• K-12 is important and also involved in training, but including K-12 now would provide toolarge a scope.

• Provide for state support.

• Businesses should lead or drive this process with assistance from government, much like theprocess for developing new K-12 charter schools which are locally driven but state supported.

• Establishing a "Corporate College" or redirecting MnSCU's efforts toward technical training.

RESOURCES: Considerable resources are currently available in company training budgets andthe state's post-secondary and K-12 systems. Much of the necessary structure is also available. Thenew system should attempt to identify existing funds that could be "redirected" to accomplish thegoal ofconcentrating all training efforts, or move the current system toward this new statewidesystem.

Final Thoughts By Committee Members - November 30, 1998

This page reflects the November 30, 1998 discussion among committee members as theyreviewed the policy recommendation on systematic workforce development which had beendeveloped on November 17, 1998 by the small group working on this issue.

Systematic Workforce Development - Training and retraining incumbent workers is vitalto Minnesota's economic future and positioning in the global economy. The discussion ofretraining efforts then turned to how to create a "system" which brings together workforcedevelopment and economic development and secondly, the importance ofmaking employers akey voice in this system.

Who Can Provide Systematic Workforce Development? Again, some believedMnSCU institutions to be logical providers of training and retraining programs for incumbentworkers. However, some added that any entity responsible for overseeing systematic workforcedevelopment should be separated from the institution ofMnSCU. The concern was to ensurethat any approach to workforce development be driven by employers and the training needs ofthe market, and the individuals needing retraining, as opposed to the needs ofan "institution."Another suggestion was that the tax code be amended to provide tax incentives to help smallemployers pay for retraining needs.

The Role ofEmployers in Systematic Workforce Development - Providing employersa strong voice in any systematic approach to workforce development was a common themevoiced by many committee members. Regardless ofwhat entity might be responsible for futureworkforce development oversight, many members emphasized that such an oversight entity mustinclude employers to help ensure it is responsive to their needs and accurately reflects job marketopportunities. Businesses, especially smaller, not only need assistance with retraining, but oftenneed help diagnosing what their retraining needs are. Employers need to be involved initiallyand throughout each stage.

POLICY RECOMMENDATIONS

III. CREATIVE WORKFORCE PARTNERSHIPS

POLICY: Provide incentives and remove barriers to establishing creative workforce partnerships toenhance Minnesota's economic capacity, strengthen Minnesota's economic competitive edge globallyand provide added value to individual partnership members.

GOALS: First and foremost, focus on the needs of the end-user, the individual business. Establishthe capacity to quickly respond, be flexible and adaptive to chffilge. Make individual businesses,labor and post-secondary institutions the key players, but also include the Department of Trade &Economic Development, Department ofEconomic Security, K-12 schools and community basedorganizations. Partnerships may use an industry group approach.

STRATEGIES:

• Funding incentives to form partnerships.

• Remove policy and fiscal barriers to forming partnerships.

• Increased application of shared and/or reallocated resources.

• Create a core capacity within government, particularly in higher education, to servebusinesses' needs and provide dedicated resources for it. (Core capacity is a core ability, orspecific basic products and services, which are available to businesses and industries).

EFFECT OF POLICY: Providing new opportunities for workforce partnerships will expandeconomic development opportunities for businesses and individuals while also providing highereducation institutions with opportunities for developing new course programs and degrees that areresponsive to businesses' needs.

RESOURCES: All members must contribute resources of some kind, i.e., intellectual, financial orother in order to maximize the leveraging ofresources available. Resources to help assess anemployer's training needs and create training programs at a higher education institution are areas ofcritical need. Assuming governmental agencies, including higher education, currently dedicate about2 percent of their budget for workforce initiatives, the goal should be to increase this, through new orshifted resources, to approximately 25 percent. Outcome measurements should be tied to funding tohelp participating governmental agencies and higher education institutions demonstrate how they aremore responsive to employers as a result.

Final Thoughts By Committee Members - November 30,1998

This page reflects the November 30, 1998 discussion among committee members as theyreviewed the policy recommendation on creative workforce partnerships which had beendeveloped on November 17, 1998 by the small group working on this issue.

Creative Workforce Partnerships - Measures to encourage developing creative workforcepartnerships were supported by several committee members as a way to leverage resources andas a potential vehicle for creating "systematic" workforce development. Some members had theopinion that while a significant amount ofpartnering was taking place at the local level, it couldbe increased at the state level. Others emphasized that partnerships should be considered in verybroad terms. However, while partnering can accomplish many things, it has its limits.

Expanding Partnering - Some members suggested that when partnerships are considered thata very broad array of trainers and analysts should be considered. More potential partners willallow for more ideas and training options. Some committee members not only pointed totraining and retraining needs, but also to the need for delivering trainin~ in new forms, such asinteractive materials in order to improve learner outcomes. Likewise, partnering issues shouldnot only assess the skill training needed by the employer, but the learning needs of the individualworkers and how best to present that training to the worker. Further, committee memberspointed out that upgrading the skills of one business often causes a ripple-effect impactingbusinesses which supply or purchase products from the business getting trained. These relatedbusinesses may also need to be involved when training partnerships are considered.

Partnering and Training Has Limits - Committee members pointed out that the mostsuccessful companies heavily invest in training and retraining of their employees. Traininginvestments are often considered to be an indicator ofhow successful a business is. However, acaution was added that many of the problems businesses experience are not related to trainingissues and cannot be solved by skill improvement strategies such as partnering for trainingpurposes. While partnering has the potential to help make businesses more successful, it will nothelp solve all of the problems and challenges faced by businesses.

POLICY RECOMMENDATIONS

IV. CAREER PLANNING

POLICY: Provide assistance in developing and maintaining a lifework plan for all learners,particularly in middle school, focusing on providing information and experiences to learners tomatch interests and skills to career opportunities.

GOALS: Develop interest in career opportunities that pay good wages and provide informationthrough school and business to facilitate a good match between skills/interests and careeropportunities. Start this process in elementary school, focus especially in middle school and continuein high school when career choices are starting to be made. -Finally, nurture and provide mechanismsthat allow for a lifetime opportunity to match skills and interests to career opportunities.

STRATEGIES:

• No less than one counselor for every 250 students in K-12. Counselors should follow andkeep track of students throughout their K-12 education.

• Community/business partnerships exposing kids to real·work life, including internships.

• School-based enterprise.

• Separate crisis counseling from career counseling to ensure career counseling is available andfocused on career information and opportunities.

• Summer workshops for counselors to their upgrade skills with no charge for tuition.

• Information provided to learners should include labor market information, skills needed(SCANS), intern opportunities and soft skills such as interviewing.

EFFECT OF POLICY: Providing a better match with skills/interests and career opportunities willhave the effect of reducing education costs and social costs by more focused workforce preparationand a better employed and satisfied workforce.

RESOURCES: This policy would require significant new resources in the form offunds andpersonnel, both of which would have difficulty in being obtained. However, many resources arecurrently in place and would simply need to be refocused, promoted and/or redirected.

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Final Thoughts By Com"mittee Members - November 30,1998

This page reflects the November 30, 1998 discussion among committee members as t/:leyreviewed the policy recommendation on career planning which had been developed onNovember 17, 1998 by the small group working on this issue.

Career Planning - Committee members shared the opinion that greater emphasis on careerplanning is needed at all levels, for all workers and that this need will only increase inimportance in the future.

Committee members had differing opinions, however, on whether a new emphasis on careerplanning should target students in the K-12 system, or older incumbent workers. Those in favorof targeting K-12 students argued that career counseling options are available to adults, butgenerally not available to students and that younger studenfs should instead be the focus toensure they get off to a good career start. Others believed the most important message toyounger students is to be a life-long learner and that the current labor shortage and skills gaprequires emphasizing the details of career planning with incumbent workers since they will bethe vast majority of the state's workers for many years to come.

Some Challenges to Career Planning - Committee members emphasized the manychallenges to career planning. Advancements intechnology make career planning difficult sincemany jobs which will be available in the future perhaps do not even exist today. Technologychanges will also make career counseling available in new formats, such as career counseling viainter-active video packages. Career planning needs also differ based on the individual'scircumstances. The state's new Workforce Center System was also suggested as one logicalplace to go for career "check-ups."

POLICY RECOMMENDATIONS

V. CUSTOMER-FOCUSED, DEMAND-BASED LEARNING

POLICY: Create a customer-driven workforce learning system which empowers the individual andoperates within the confines of industry-based employment demands.

GOALS: Increase the skills ofMinnesota's workers and match those new skills with the needs ofindustry. Give individuals more control over their learning. Improve the individual's ability torespond to employer-based job demands and obtain the learning that best meets their needs. Assistindividuals in obtaining learning that results in good paying jobs. Make learning more flexible to theneeds of workers and responsive to the needs ofemployers.

STRATEGIES:

• Provide funding for learning directly to individuals.

• Provide incentives to individuals who choose to train in high-demand areas or industry fields,i.e., information technology, e-commerce, etc.

• Incentives to individuals could include tuition waivers, as well as state tax credits ordeductions for training or retraining costs.

• Encourage learning systems which are flexible, able to respond quickly to market trends andwhich provide for flexible curriculums that can deliver on-site and on-line job training.

EFFECT OF POLICY: Policies which emphasize matching skills with demand will moreeffectively fulfill the pUblic's purpose. Training funds will be linked more closely to individuals andlinked less to systems. More training options will be available to individuals. Training vendors,which may be public or private, will be held more accountable. Competitive environment wouldlikely result in an increase in market share for those training vendors meeting customer needs and adecrease for those that do not.

RESOURCES: This policy change may, or may not, require new resources. Currentexpenditures must be examined first before considering any new funding.

Final Thoughts By Committee Members - November 30, 1998

This page reflects the November 30, 1998 discussion among committee members as theyreviewed the·policy recommendation on customer-focused, demand-based learning which hadbeen developed on November 17, 1998 by the small group working on this issue.

Customer-Focused~ Demand-Based Learning - Two· proposals came together in thispolicy proposal. First, training funding should be linked more closely to individuals who maythen choose any training provider available. Secondly, training funds should be more closelylinked to occupations and skills where demand exists and good paying jobs are available.

Discussion of this policy proposal included aspects ofeach.of the previous four proposals.Committee members offered a variety ofchallenges, suggestions and comments.

Challenges, Suggestions and Comments - Decisions regarding what training to take orwhat should be made available pose challenging questions about economic realities to bothindividuals and training providers. Committee members expressed concern that individualsshould have the most complete information possible about skiJls required for jobs, trainingproviders available to teach those skills and existing information about job availability and futurecareer trends.

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Others added that training incentives made to individuals should be targeted to particularoccupations or sectors with great need. Others warned that it is difficult to predict where jobswill be and prediction attempts are often wrong, especially in today's dynamic global economy.

Proponents of this concept of customer-focused, demand-based learning argued that the twoconcepts really do tie together employers, employees and trainers. In such a system, employers.decide what training they need. Training providers compete against each other to provide thattraining. And individuals choose what training fits them and what trainer best suits their needs.